First-half 2012 net income of $9.9 billion, EPS of $2.41 and
revenue of $49.6 billion not impacted by first-quarter 2012
restatement; second-quarter 2012 balance sheet and capital ratios also
not impacted4

Provided $130 billion of credit3 to
consumers in the first six months of 2012

Issued new credit cards to 3.3 million people

Originated over 425,000 mortgages

Provided nearly $10 billion of credit to U.S. small businesses
in the first six months, up 35% compared with prior year

Provided $260 billion of credit3 to
corporations in the first six months

Raised over $460 billion of capital for clients in the first
six months

Nearly $29 billion of capital raised for and credit3
provided to more than 900 nonprofit and government entities in the
first six months, including states, municipalities, hospitals and
universities

Hired more than 4,000 U.S. veterans since the beginning of 2011

July 13, 2012 06:59 AM Eastern Daylight Time

NEW YORK--(BUSINESS WIRE)--JPMorgan Chase & Co. (NYSE: JPM) today reported second-quarter 2012 net
income of $5.0 billion, compared with net income of $5.4 billion in the
second quarter of 2011. Earnings per share were $1.21, compared with
$1.27 in the second quarter of 2011. The Firm’s return on tangible
common equity1 for the second quarter of 2012 was 15%,
compared with 17% in the prior year.

Jamie Dimon, Chairman and Chief Executive Officer, commented on
financial results: “Importantly, all of our client-driven businesses had
solid performance. However, there were several significant items that
affected the quarter’s results – some positively; some negatively. These
included $4.4 billion of losses on CIO’s synthetic credit portfolio,
$1.0 billion of securities gains in CIO and a $545 million gain on a
Bear Stearns-related first-loss note, for which the Firm now expects
full recovery. The Firm’s results also included $755 million of DVA
gains, reflecting adjustments for the widening of the Firm’s credit
spreads which, as we have consistently said, do not reflect the
underlying operations of the Firm. The Firm also reduced loan loss
reserves by $2.1 billion, mostly for the mortgage and credit card
portfolios. These reductions in reserves are based on the same
methodologies we have used in the past – the good news is that these
reductions reflected meaningful improvements in delinquencies and
estimated losses in these portfolios. We continue to maintain strong
reserves.”

Dimon continued: “Since the end of the first quarter, we have
significantly reduced the total synthetic credit risk in CIO – whether
measured by notional amounts, stress testing or other statistical
methods. The reduction in risk has brought the portfolio to a scale that
allowed us to transfer substantially all remaining synthetic credit
positions to the Investment Bank*. The Investment Bank has
the expertise, capacity, trading platforms and market franchise to
effectively manage these positions and maximize economic value going
forward. As a result of the transfer, the Investment Bank’s
Value-at-Risk and Risk Weighted Assets will increase, but we believe
they will come down over time. Importantly, we have put most of this
problem behind us and we can now focus our full energy on what we do
best – serving our clients and communities around the world.”

Commenting further on CIO, Dimon said: “CIO will no longer trade a
synthetic credit portfolio and will focus on its core mandate of
conservatively investing excess deposits to earn a fair return. CIO’s
$323 billion available-for-sale portfolio had $7.9 billion of net
unrealized gains at the end of the quarter. This portfolio has an
average rating of AA+, has a current yield of approximately 2.6%, and is
positioned to help to protect the Firm against rapidly rising interest
rates. In addition to CIO, we have $175 billion in cash and deposits,
primarily invested at central banks.”

“The Firm has been conducting an extensive review of what happened in
CIO and we will be sharing our observations today. We have already
completely overhauled CIO management and enhanced the governance
standards within CIO. We believe these events to be isolated to CIO, but
have taken the opportunity to apply lessons learned across the Firm. The
Board of Directors is independently overseeing and guiding the Company’s
review, including any additional corrective actions. While our review
continues, it is important to note that no client was impacted.”

Commenting on the balance sheet, Dimon said: “Our fortress balance sheet
remained strong, ending the second quarter with a strong Basel I Tier 1
common ratio of 10.3%. We estimate that our Basel III Tier 1 common
ratio was approximately 7.9% at the end of the second quarter, after the
effect of the final Basel 2.5 rules and the Federal Reserve’s recent
Notice of Proposed Rulemaking.”

Dimon concluded: “Through the depth of the financial crisis and through
recent events, we have never stopped fulfilling our mission: to serve
clients – consumers and companies – and communities around the globe.
During the first half of 2012, we provided $130 billion of credit to
consumers. Over the same period we provided nearly $10 billion of credit
to small businesses, the engine of growth for our economy, up 35%
compared with the same period last year. For America’s largest
companies, we raised or lent over $720 billion of capital in the first
six months to help them build and expand around the world. Even in this
difficult economy, we have added thousands of new employees across the
country – over 62,000 since January 2008. In 2011, we founded the
“100,000 Jobs Mission” – a partnership with 54 other companies to hire
100,000 U.S. veterans by the year 2020. We have hired more than 4,000
veterans since the beginning of 2011, in addition to the thousands of
veterans who already worked at our Firm. I am proud of JPMorgan Chase
and what all of our employees do every day to serve our clients and
communities in a first-class way.”

In the discussion below of the business segments and of JPMorgan
Chase as a Firm, information is presented on a managed basis. For more
information about managed basis, as well as other non-GAAP financial
measures used by management to evaluate the performance of each line of
business, see page 14. The following discussion compares the second
quarters of 2012 and 2011 unless otherwise noted.

INVESTMENT BANK (IB)

Results for IB

1Q12

2Q11

($ millions)

2Q12

1Q12

2Q11

$ O/(U)

O/(U) %

$ O/(U)

O/(U) %

Net Revenue

$6,766

$7,321

$7,314

($555)

(8)%

($548)

(7)%

Provision for Credit Losses

21

(5)

(183)

26

NM

204

NM

Noninterest Expense

3,802

4,738

4,332

(936)

(20)

(530)

(12)

Net Income

$1,913

$1,682

$2,057

$231

14%

($144)

(7)%

Discussion of Results:

Net income was $1.9 billion, down 7% from the prior year. These results
reflected lower net revenue and a provision for credit losses compared
with a benefit in the prior year, largely offset by lower noninterest
expense.

Net revenue included a $755 million gain from DVA on certain structured
and derivative liabilities resulting from the widening of the Firm’s
credit spreads; this gain was composed of $241 million in Fixed Income
Markets, $200 million in Equity Markets and $314 million in Credit
Portfolio. Excluding the impact of DVA, net revenue was $6.0 billion and
net income was $1.4 billion.

Excluding the impact of DVA, Fixed Income and Equity Markets combined
revenue was $4.5 billion, down 15% from the prior year, primarily
reflecting the impact of weaker market conditions, with solid client
revenue. Excluding the impact of DVA, Credit Portfolio net revenue was
$230 million, driven by net interest income on retained loans and fees
on lending-related commitments.

The provision for credit losses was $21 million, compared with a benefit
in the prior year of $183 million. The ratio of the allowance for loan
losses to end-of-period loans retained was 1.97%, compared with 2.10% in
the prior year. Excluding the impact of consolidation of
Firm-administered multi-seller conduits effective on January 1, 2010,
the ratio of the allowance for loan losses to end-of-period loans
retained was 3.19%1, compared with 3.34%1 in the
prior year.

Noninterest expense was $3.8 billion, down 12% from the prior year,
driven by lower compensation expense. The ratio of compensation to net
revenue was 33%, excluding DVA.

Key Metrics and Business Updates:(All comparisons
refer to the prior-year quarter except as noted, and all rankings are
according to Dealogic)

Ranked #1 in Global Investment Banking Fees for the six months ended
June 30, 2012.

Ranked #1 in Global Debt, Equity and Equity-related; #1 in Global
Long-Term Debt; #1 in Global Syndicated Loans; #2 in Global Announced
M&A and #3 in Global Equity and Equity-related, based on year to date
volume, for the six months ended June 30, 2012.

Return on equity was 19% on $40.0 billion of average allocated capital
(15% excluding DVA).

End-of-period total loans were $74.4 billion, up 25% from the prior
year and 2% from the prior quarter. Nonaccrual loans of $815 million
were down 52% from the prior year and 7% from the prior quarter.

RETAIL FINANCIAL SERVICES (RFS)

Results for RFS

1Q12

2Q11

($ millions)

2Q12

1Q12

2Q11

$ O/(U)

O/(U) %

$ O/(U)

O/(U) %

Net Revenue

$7,935

$7,649

$7,142

$286

4%

$793

11%

Provision for Credit Losses

(555)

(96)

994

(459)

(478)

(1,549)

NM

Noninterest Expense

4,726

5,009

5,271

(283)

(6)

(545)

(10)

Net Income

$2,267

$1,753

$383

$514

29%

$1,884

492%

Discussion of Results:

Net income was $2.3 billion, compared with $383 million in the prior
year.

Net revenue was $7.9 billion, an increase of $793 million, or 11%,
compared with the prior year. Net interest income was $3.9 billion, down
$126 million, or 3%, driven by the impact of lower deposit spreads and
lower loan balances due to portfolio runoff, largely offset by higher
deposit balances. Noninterest revenue was $4.0 billion, an increase of
$919 million, or 30%, driven by higher mortgage fees and related income,
partially offset by lower debit card revenue.

The provision for credit losses was a benefit of $555 million compared
with a provision expense of $994 million in the prior year and a benefit
of $96 million in the prior quarter. The current-quarter provision
reflected a $1.4 billion reduction in the allowance for loan losses due
to lower estimated losses as mortgage delinquency trends continued to
improve, and to a lesser extent, a refinement of our incremental loss
estimates with respect to certain borrower assistance programs. The
prior-year provision for credit losses reflected higher net charge-offs;
the prior-quarter provision reflected a $1.0 billion reduction of the
allowance for loan losses.

Noninterest expense was $4.7 billion, a decrease of $545 million, or
10%, from the prior year.

Consumer & Business Banking reported net income of $946
million, a decrease of $152 million, or 14%, compared with the prior
year.

Net revenue was $4.3 billion, down 6% from the prior year. Net interest
income was $2.7 billion, down 1% compared with the prior year, driven by
the impact of lower deposit spreads, predominantly offset by higher
deposit balances. Noninterest revenue was $1.6 billion, a decrease of
13%, driven by lower debit card revenue, reflecting the impact of the
Durbin Amendment.

The provision for credit losses was a benefit of $2 million, compared
with a provision expense of $42 million in the prior year. The
current-quarter provision reflected a $100 million reduction in the
allowance for loan losses due to lower estimated losses as delinquency
trends continued to improve. Net charge-offs were $98 million (2.20% net
charge-off rate), compared with $117 million (2.74% net charge-off rate)
in the prior year.

Noninterest expense was $2.7 billion, up 1% from the prior year,
including the benefit of certain adjustments in the current quarter.

Key Metrics and Business Updates:(All comparisons
refer to the prior-year quarter except as noted and banking portal
ranking per compete.com)

Average total deposits were $389.5 billion, up 8% from the prior year
and 2% from the prior quarter, with growth rates among the best in the
industry.

Deposit margin was 2.62%, compared with 2.83% in the prior year and
2.68% in the prior quarter.

Checking accounts totaled 27.4 million, up 4% from the prior year and
1% from the prior quarter.

Number of branches was 5,563, an increase of 223 from the prior year
and 22 from the prior quarter. Chase Private Client locations were
738, an increase of 722 from the prior year and 372 from the prior
quarter.

End-of-period Business Banking loans were $18.2 billion, up 6% from
the prior year and 2% from the prior quarter; originations were $1.8
billion, up 14% from the prior year and 16% from the prior quarter;
Chase continues to be the #1 SBA lender (in units).

Branch sales of credit cards were down 19% from the prior year and up
11% from the prior quarter.

Branch sales of investment products were down 3% compared with the
prior year and 6% from the prior quarter.

Client investment assets, excluding deposits, were $147.6 billion, up
5% from the prior year and relatively flat from the prior quarter.

Number of active mobile customers was 9.1 million, an increase of 38%
compared with the prior year and 6% compared with the prior quarter;
QuickDeposit active customers grew over 2.5 times compared with the
prior year and QuickPay active customers tripled compared with the
prior year.

Number of active online customers was 17.9 million, an increase of 5%
compared with the prior year and flat to the prior quarter; Chase.com
is the #1 most visited banking portal in the U.S.

Mortgage Production and Servicing reported net income of $604
million, compared with a net loss of $649 million in the prior year.

Mortgage production reported pretax income of $931 million, an increase
of $645 million from the prior year. Mortgage production-related
revenue, excluding repurchase losses, was $1.6 billion, an increase of
$595 million, or 62%, from the prior year, reflecting wider margins,
driven by market conditions and mix, and higher volumes, due to a
favorable refinancing environment, including the impact of the Home
Affordable Refinance Programs (“HARP”). Production expense was $620
million, an increase of $163 million, or 36%, reflecting higher volumes.
Repurchase losses were $10 million, compared with $223 million in the
prior year and $302 million in the prior quarter. The current quarter
reflected a $216 million reduction in the repurchase liability and lower
realized repurchase losses when compared to prior quarter.

Mortgage servicing reported pretax income of $65 million, compared with
a pretax loss of $1.1 billion in the prior year. Mortgage servicing
revenue, including mortgage servicing rights (“MSR”) amortization, was
$785 million, an increase of $223 million, or 40%, from the prior year.
This increase reflected reduced amortization as a result of a lower MSR
asset value. Servicing expense was $953 million, a decrease of $775
million, or 45%, from the prior year. The prior-year servicing expense
included approximately $1.0 billion of incremental expense related to
foreclosure-related matters. MSR risk management income was $233
million, compared with $25 million in the prior year.

Key Metrics and Business Updates:(All comparisons
refer to the prior-year quarter except as noted)

Mortgage loan originations were $43.9 billion, up 29% from the prior
year and 14% compared with the prior quarter; Retail channel
originations (branch and direct to consumer) were a record of $26.1
billion, up 26% from the prior year and 12% compared with the prior
quarter.

Mortgage loan application volumes were $66.9 billion, up 37% from the
prior year and 12% from the prior quarter, primarily reflecting
refinancing activity.

Total third-party mortgage loans serviced was $860.0 billion, down 9%
from the prior year and 3% from the prior quarter.

Real Estate Portfolios reported net income of $717 million,
compared with a net loss of $66 million in the prior year. The increase
was driven by a benefit from the provision for credit losses, reflecting
continued improvement in credit trends.

Net revenue was $1.0 billion, down by $177 million, or 15%, from the
prior year. The decrease was driven by a decline in net interest income,
resulting from lower loan balances due to portfolio runoff.

The provision for credit losses reflected a benefit of $554 million,
compared with provision expense of $954 million in the prior year. The
current-quarter provision benefit reflected lower charge-offs as
compared with the prior year and a $1.25 billion reduction in the
allowance for loan losses due to lower estimated losses as delinquency
trends continued to improve, and to a lesser extent, a refinement of our
incremental loss estimates with respect to certain borrower assistance
programs. Home equity net charge-offs were $466 million (2.53% net
charge-off rate1), compared with $592 million (2.83% net
charge-off rate1) in the prior year. Subprime mortgage net
charge-offs were $112 million (4.94% net charge-off rate1),
compared with $156 million (5.85% net charge-off rate1).
Prime mortgage, including option ARMs, net charge-offs were $114 million
(1.08% net charge-off rate1), compared with $198 million
(1.67% net charge-off rate1).

Nonaccrual loans were $6.7 billion, compared with $6.9 billion in the
prior year and $7.0 billion in the prior quarter. Based upon regulatory
guidance issued in the first quarter of 2012, the Firm began reporting
performing junior liens that are subordinate to nonaccrual senior liens
as nonaccrual loans. Prior year has not been restated for this reporting
change. Such junior liens were $1.5 billion in the current quarter and
$1.6 billion in the prior quarter.

Noninterest expense was $412 million, up by $41 million, or 11%, from
the prior year due to an increase in servicing costs.

Key Metrics and Business Updates:(All comparisons
refer to the prior-year quarter except as noted. Average loans include
PCI loans)

Average home equity loans were $96.1 billion, down by $11.6 billion.

Average mortgage loans were $92.9 billion, down by $11.5 billion.

Allowance for loan losses was $12.2 billion, compared with $14.7
billion in the prior year.

Allowance for loan losses to ending loans retained, excluding PCI
loans was 5.20%, compared with 6.90% in the prior year.

CARD SERVICES & AUTO (Card)

Results for Card

1Q12

2Q11

($ millions)

2Q12

1Q12

2Q11

$ O/(U)

O/(U) %

$ O/(U)

O/(U) %

Net Revenue

$4,525

$4,714

$4,761

($189)

(4)%

($236)

(5)%

Provision for Credit Losses

734

738

944

(4)

(1)

(210)

(22)

Noninterest Expense

2,096

2,029

1,988

67

3

108

5

Net Income

$1,030

$1,183

$1,110

($153)

(13)%

($80)

(7)%

Discussion of Results:

Net income was $1.0 billion, a decrease of $80 million, or 7%, compared
with the prior year. The decrease was driven by a lower reduction in the
allowance for loan losses compared with the prior year.

Net revenue was $4.5 billion, a decrease of $236 million, or 5%, from
the prior year. Net interest income was $3.3 billion, down $176 million,
or 5%, from the prior year. The decrease was driven by narrower loan
spreads, partially offset by lower revenue reversals associated with
lower net charge-offs. Noninterest revenue was $1.2 billion, a decrease
of $60 million, or 5%, from the prior year. The decrease was driven by
higher amortization of direct loan origination costs, partially offset
by higher net interchange income.

The provision for credit losses was $734 million, compared with
$944 million in the prior year and $738 million in the prior quarter.
The current-quarter provision reflected lower net charge-offs and a $751
million reduction in the allowance for loan losses due to lower
estimated losses. The prior-year provision included a $1.0 billion
reduction in the allowance for loan losses. The Credit Card net
charge-off rate1 was 4.32%, down from 5.81% in the prior year
and 4.37% in the prior quarter; and the 30+ day delinquency rate1
was 2.13%, down from 2.98% in the prior year and 2.55% in the prior
quarter. The net charge-off rate for the quarter would have been 4.03%1
absent a policy change on restructured loans that do not comply with
their modified payment terms. These loans will now charge-off when they
are 120 days past due rather than 180 days past due. This change
resulted in a one-time acceleration of $91 million in net charge-offs in
the current quarter only, and a permanent reduction in the 30+ day
delinquency rate which is 0.10% for the current quarter. The one-time
acceleration of net charge-offs is offset by a reduction in the
allowance for loan losses. The Auto net charge-off rate was 0.17%, up
from 0.16% in the prior year and down from 0.28% in the prior quarter.

Noninterest expense was $2.1 billion, an increase of $108 million, or
5%, from the prior year, due to additional expense related to a non-core
product that is being exited.

Key Metrics and Business Updates:(All comparisons
refer to the prior-year quarter except as noted)

Return on equity was 25% on $16.5 billion of average allocated capital.

Credit Card average loans were $125.2 billion, flat compared with
prior year and down 2% from the prior quarter.

#1 credit card issuer in the U.S. based on outstandings2;
#1 Global Visa issuerbased on consumer and business credit
card sales volume2.

Credit Card sales volume2 was $96.0 billion, up 12%
compared with the prior year and 10% compared with the prior quarter;
Card Services general purpose credit card sales volume growth has
outperformed the industry since 1Q082.

Credit Card new accounts of 1.6 million were opened; Credit Card open
accounts of 63.7 million.

Card Services net revenue as a percentage of average loans was 11.91%,
compared with 12.60% in the prior year and 12.22% in the prior quarter.

Merchant processing volume was $160.2 billion, up 17% from the prior
year and 5% from the prior quarter; total transactions processed were
7.1 billion, up 20% from the prior year and 4% from the prior quarter.

Average auto loans were $48.3 billion, up 3% from the prior year and
1% from the prior quarter.

Auto originations were $5.8 billion, up 7% from the prior year and
flat to the prior quarter.

COMMERCIAL BANKING (CB)

Results for CB

1Q12

2Q11

($ millions)

2Q12

1Q12

2Q11

$ O/(U)

O/(U) %

$ O/(U)

O/(U) %

Net Revenue

$1,691

$1,657

$1,627

$34

2%

$64

4%

Provision for Credit Losses

(17)

77

54

(94)

NM

(71)

NM

Noninterest Expense

591

598

563

(7)

(1)

28

5

Net Income

$673

$591

$607

$82

14%

$66

11%

Discussion of Results:

Net income was $673 million, an increase of $66 million, or 11%, from
the prior year. The improvement was driven by a benefit from the
provision for credit losses and an increase in net revenue, partially
offset by higher expense.

Record net revenue was $1.7 billion, an increase of $64 million, or 4%,
from the prior year. Net interest income was $1.1 billion, up by
$100 million, or 10%, driven by growth in liability and loan balances,
partially offset by spread compression on loan and liability products.
Noninterest revenue was $562 million, down by $36 million, or 6%,
compared with the prior year, driven by lower investment banking revenue
and deposit- and lending-related fees.

Revenue from Middle Market Banking was $833 million, an increase of $44
million, or 6%, from the prior year. Revenue from Commercial Term
Lending was $291 million, an increase of $5 million, or 2%, compared
with the prior year. Revenue from Corporate Client Banking was
$343 million, an increase of $4 million, or 1%, from the prior year.
Revenue from Real Estate Banking was $114 million, an increase of $5
million, or 5%, from the prior year.

The provision for credit losses was a benefit of $17 million, compared
with provision for credit losses of $54 million in the prior year. There
were net recoveries of $9 million in the current quarter (0.03% net
recovery rate), compared with net charge-offs of $40 million (0.16% net
charge-off rate) in the prior year and $12 million (0.04% net charge-off
rate) in the prior quarter. The allowance for loan losses to period-end
loans retained was 2.20%, down from 2.56% in the prior year and 2.32% in
the prior quarter. Nonaccrual loans were $917 million, down by
$717 million, or 44%, from the prior year, largely due to commercial
real estate repayments and loan sales; and were down $87 million, or 9%,
from the prior quarter.

Key Metrics and Business Updates:(All comparisons
refer to the prior-year quarter except as noted)

Return on equity was 28% on $9.5 billion of average allocated capital.

Overhead ratio was 35%, flat from the prior year.

Gross investment banking revenue (which is shared with the Investment
Bank) was $384 million, down by $58 million, or 13%.

Record average loan balances were $118.4 billion, up by $16.6 billion,
or 16%, from the prior year and $4.7 billion, or 4%, from the prior
quarter.

Record end-of-period loan balances were $120.5 billion, up by $17.8
billion, or 17%, from the prior year and $4.6 billion, or 4%, from the
prior quarter.

Average liability balances were $193.3 billion, up by $30.5 billion,
or 19%, from the prior year and down by $6.9 billion, or 3%, from the
prior quarter.

TREASURY & SECURITIES SERVICES (TSS)

Results for TSS

1Q12

2Q11

($ millions)

2Q12

1Q12

2Q11

$ O/(U)

O/(U) %

$ O/(U)

O/(U) %

Net Revenue

$2,152

$2,014

$1,932

$138

7%

$220

11%

Provision for Credit Losses

8

2

(2)

6

300

10

NM

Noninterest Expense

1,491

1,473

1,453

18

1

38

3

Net Income

$463

$351

$333

$112

32%

$130

39%

Discussion of Results:

Net income was $463 million, an increase of $130 million, or 39%, from
the prior year. Compared with the prior quarter, net income increased by
$112 million, or 32%, driven by higher Global Corporate Bank credit
allocation benefit and seasonal activity in securities lending and
depositary receipts.

TSS generated firmwide net revenue2 of $2.8 billion,
including $1.7 billion by TS; of that amount, $1.1 billion was recorded
in TS, $603 million in Commercial Banking, and $68 million in other
lines of business. The remaining $1.1 billion of firmwide net revenue
was recorded in Worldwide Securities Services.

Noninterest expense was $1.5 billion, an increase of $38 million, or 3%,
from the prior year. The increase was driven by continued expansion into
new markets.

Key Metrics and Business Updates:(All comparisons
refer to the prior-year quarter except as noted)

Pretax margin2 was 34%, compared with 27% in the prior year
and prior quarter.

Return on equity was 25% on $7.5 billion of average allocated capital.

Average liability balances were $348.1 billion, up 15%.

Assets under custody were $17.7 trillion, up 4%.

End-of-period trade finance loans were $35.3 billion, up 28%.

International revenue was $1.2 billion, up 12%, and represented 55% of
total revenue.

ASSET MANAGEMENT (AM)

Results for AM

1Q12

2Q11

($ millions)

2Q12

1Q12

2Q11

$ O/(U)

O/(U) %

$ O/(U)

O/(U) %

Net Revenue

$2,364

$2,370

$2,537

($6)

-

($173)

(7)%

Provision for Credit Losses

34

19

12

15

79

22

183

Noninterest Expense

1,701

1,729

1,794

(28)

(2)

(93)

(5)

Net Income

$391

$386

$439

$5

1%

($48)

(11)%

Discussion of Results:

Net income was $391 million, a decrease of $48 million, or 11%, from the
prior year. These results reflected lower net revenue and higher
provision for credit losses, partially offset by lower noninterest
expense.

Net revenue was $2.4 billion, a decrease of $173 million, or 7%, from
the prior year. Noninterest revenue was $1.9 billion, down by
$287 million, or 13%, primarily due to lower performance fees, lower
valuations of seed capital investments and the effect of lower market
levels, partially offset by net product inflows. Net interest income was
$512 million, up by $114 million, or 29%, primarily due to higher
deposit and loan balances.

Revenue from Private Banking was $1.3 billion, up 4% from the prior
year. Revenue from Institutional was $537 million, down 23%. Revenue
from Retail was $486 million, down 12%.

Assets under supervision were $2.0 trillion, an increase of $44 billion,
or 2%, from the prior year. Assets under management were $1.3 trillion,
an increase of $5 billion, as net inflows to long-term products were
offset by the effect of lower market levels and net outflows from
liquidity products. Custody, brokerage, administration and
deposit balances were $621 billion, up by $39 billion, or 7%, due to
custody and deposit inflows.

The provision for credit losses was $34 million, compared with $12
million in the prior year.

Noninterest expense was $1.7 billion, a decrease of $93 million, or 5%,
from the prior year, due to the absence of non-client-related litigation
expense and lower performance-based compensation.

Key Metrics and Business Updates:(All comparisons
refer to the prior-year quarter except as noted)

Assets under management ranked in the top two quartiles for investment
performance were 74% over 5 years, 72% over 3 years and 65% over 1
year.

Customer assets in 4 and 5 Star–rated funds were 43% of all rated
mutual fund assets.

Assets under supervision were $2.0 trillion, up 2% from the prior year
and down 2% from the prior quarter.

Average loans were $67.1 billion, up 37% from the prior year and 13%
from the prior quarter.

End-of-period loans were $70.5 billion, up 36% from the prior year and
10% from the prior quarter.

Average deposits were $128.1 billion, up 31% from the prior year and
flat to the prior quarter.

CORPORATE/PRIVATE EQUITY

Results for Corporate/Private

1Q12

2Q11

Equity ($ millions)

2Q12

1Q12*

2Q11

$ O/(U)

O/(U) %

$ O/(U)

O/(U) %

Net Revenue

($2,609)

$1,029

$2,065

($3,638)

NM

($4,674)

NM

Provision for Credit Losses

(11)

(9)

(9)

(2)

(22)%

(2)

(22)%

Noninterest Expense

559

2,769

1,441

(2,210)

(80)

(882)

(61)

Net Income/(Loss)

($1,777)

($1,022)

$502

($755)

(74)%

($2,279)

NM

(*) On July 13, 2012, JPMorgan Chase & Co. reported that it will be
restating its previously-filed interim financial statements for the
first quarter 2012. See note 3 on page 15.

Discussion of Results:

Net loss was $1.8 billion, compared with net income of $502 million in
the prior year.

Private Equity reported net income of $197 million, compared with net
income of $444 million in the prior year. Net revenue of $410 million
was down from $796 million in the prior year, primarily due to lower
gains on sales and lower net valuation gains on private investments,
partially offset by higher mark-to-market gains on public securities.
Noninterest expense was $102 million, unchanged from the prior year.

Treasury and CIO reported a net loss of $2.1 billion, compared with net
income of $670 million in the prior year. Net revenue was a loss of $3.4
billion, compared with net revenue of $1.4 billion in the prior year.
The current quarter loss reflected $4.4 billion of principal
transactions losses from a portfolio held by CIO, partially offset by
securities gains of $1.0 billion. Net interest income was negative
$30 million, compared with $450 million in the prior year, reflecting
lower portfolio yields and the impact of higher deposit balances across
the Firm.

Other Corporate reported net income of $104 million, compared with a net
loss of $612 million in the prior year. Noninterest revenue was $552
million including a $545 million gain reflecting the expected full
recovery on a Bear Stearns-related first-loss note. Noninterest expense
of $335 million was down $736 million compared with the prior year. The
current quarter included $335 million of additional litigation expense.
The prior year included $1.3 billion of additional litigation expense,
which was predominantly for mortgage-related matters.

JPMORGAN CHASE (JPM)(*)

Results for JPM

1Q12

2Q11

($ millions)

2Q12

1Q12**

2Q11

$ O/(U)

O/(U) %

$ O/(U)

O/(U) %

Net Revenue

$22,892

$26,757

$27,410

($3,865)

(14)%

($4,518)

(16)%

Provision for Credit Losses

214

726

1,810

(512)

(71)

(1,596)

(88)

Noninterest Expense

14,966

18,345

16,842

(3,379)

(18)

(1,876)

(11)

Net Income

$4,960

$4,924

$5,431

$36

1%

($471)

(9)%

(*) Presented on a managed basis. See notes on page 13 for further
explanation of managed basis. Net revenue on a U.S. GAAP basis totaled
$22,180 million, $26,052 million, and $26,779 million for the second
quarter of 2012, first quarter of 2012, and second quarter of 2011,
respectively.

(**) On July 13, 2012, JPMorgan Chase & Co. reported that it will be
restating its previously-filed interim financial statements for the
first quarter 2012. See note 3 on page 15.

Discussion of Results:

Net income was $5.0 billion, down by $471 million, or 9%, from the prior
year. The decrease in earnings was driven by lower net revenue, largely
offset by lower noninterest expense and a lower provision for credit
losses.

Net revenue was $22.9 billion, down by $4.5 billion, or 16%, compared
with the prior year. Noninterest revenue was $11.6 billion, down by $3.9
billion, or 25%, from the prior year, due to $4.4 billion of principal
transactions losses from a portfolio held by CIO and lower investment
banking fees, partially offset by higher mortgage fees and related
income. Net interest income was $11.3 billion, down by $616 million, or
5%, compared with the prior year, reflecting the impact of low interest
rates, as well as lower trading asset balances, higher financing costs
associated with mortgage-backed securities, and the runoff of
higher-yielding loans, largely offset by lower other borrowing and
deposit costs.

The provision for credit losses was $214 million, down $1.6 billion, or
88%, from the prior year. The total consumer provision for credit losses
was $171 million, down $1.8 billion from the prior year. The decrease in
the consumer provision reflected a $2.1 billion reduction of the related
allowance for loan losses predominantly related to the mortgage and
credit card portfolios as delinquency trends improved and estimated
losses declined, and to a lesser extent, a refinement of our incremental
loss estimates with respect to certain borrower assistance programs.
Consumer net charge-offs1 were $2.3 billion, compared with
$3.0 billion in the prior year, resulting in net charge-off rates of
2.51% and 3.25%, respectively. The wholesale provision for credit losses
was $43 million compared with a benefit of $117 million. The current
quarter provision primarily reflected loan growth and other portfolio
activity. Wholesale net charge-offs were $9 million, compared with $80
million in the prior year, resulting in net charge-off rates of 0.01%
and 0.14%, respectively. The Firm’s allowance for loan losses to
end-of-period loans retained1 was 2.74%, compared with 3.83%
in the prior year. The Firm’s nonperforming assets totaled $11.4 billion
at June 30, 2012, down from the prior-year level of $13.4 billion and
down from the prior-quarter level of $12.0 billion.

Noninterest expense was $15.0 billion, down $1.9 billion, or 11% from
the prior year driven by lower noncompensation expense. The prior year
noninterest expense included a total of $2.3 billion for additional
litigation expense, predominantly for mortgage-related matters, and
expense for the estimated costs of foreclosure-related matters.

Key Metrics and Business Updates:(All comparisons
refer to the prior-year quarter except as noted)

Basel I Tier 1 common ratio1 was 10.3% at June 30, 2012,
compared with 10.3%4 at March 31, 2012, and 10.1% at June
30, 2011.

Headcount was 262,882, an increase of 12,787, or 5%.

1. Notes on non-GAAP financial measures:

a. In addition to analyzing the Firm’s results on a reported basis,
management reviews the Firm’s results and the results of the lines of
business on a “managed” basis, which is a non-GAAP financial measure.
The Firm’s definition of managed basis starts with the reported U.S.
GAAP results and includes certain reclassifications to present total net
revenue for the Firm (and each of the business segments) on a fully
taxable-equivalent (“FTE”) basis. Accordingly, revenue from tax-exempt
securities and investments that receive tax credits is presented in the
managed results on a basis comparable to taxable securities and
investments. This non-GAAP financial measure allows management to assess
the comparability of revenue arising from both taxable and tax-exempt
sources. The corresponding income tax impact related to tax-exempt items
is recorded within income tax expense. These adjustments have no impact
on net income as reported by the Firm as a whole or by the lines of
business.

b. The ratio of the allowance for loan losses to end-of-period loans
excludes the following: loans accounted for at fair value and loans
held-for-sale; purchased credit-impaired (“PCI”) loans; and the
allowance for loan losses related to PCI loans. Additionally, Real
Estate Portfolios net charge-off rates exclude the impact of PCI loans.
The allowance for loan losses related to the PCI portfolio totaled $5.7
billion, $5.7 billion and $4.9 billion at June 30, 2012, March 31, 2012,
and June 30, 2011, respectively. In IB, the ratio for the allowance for
loan losses to end-of-period loans is calculated excluding the impact of
consolidation of Firm-administered multi-seller conduits effective on
January 1, 2010, to provide a more meaningful assessment of the IB’s
allowance coverage.

c. Tangible common equity (“TCE”) represents common stockholders’ equity
(i.e., total stockholders’ equity less preferred stock) less goodwill
and identifiable intangible assets (other than MSRs), net of related
deferred tax liabilities. Return on tangible common equity measures the
Firm’s earnings as a percentage of TCE. In management’s view, these
measures are meaningful to the Firm, as well as analysts and investors,
in assessing the Firm’s use of equity, and in facilitating comparisons
with peers.

d. The Basel I Tier 1 common ratio is Tier 1 common divided by
risk-weighted assets. Tier 1 common is defined as Tier 1 capital less
elements of Tier 1 capital not in the form of common equity, such as
perpetual preferred stock, noncontrolling interests in subsidiaries, and
trust preferred capital debt securities. Tier 1 common, a non-GAAP
financial measure, is used by banking regulators, investors and analysts
to assess and compare the quality and composition of the Firm’s capital
with the capital of other financial services companies. The Firm uses
Tier 1 common along with other capital measures to assess and monitor
its capital position. On December 16, 2010, the Basel Committee issued
the final version of the Basel Capital Accord, commonly referred to as
“Basel III.” The Firm’s estimate of its Tier 1 common ratio under Basel
III is a non-GAAP financial measure and reflects the Firm’s current
understanding of the Basel III rules and the application of such rules
to its businesses as currently conducted, and therefore excludes the
impact of any changes the Firm may make in the future to its businesses
as a result of implementing the Basel III rules. The Firm’s estimates of
its Basel III Tier 1 common ratio will evolve over time as the Firm’s
businesses change, and as a result of further rule-making on Basel III
implementation from U.S. federal banking agencies. Management considers
this estimate as a key measure to assess the Firm’s capital position in
conjunction with its capital ratios under Basel I requirements, in order
to enable management, investors and analysts to compare the Firm’s
capital under the Basel III capital standards with similar estimates
provided by other financial services companies. The Firm’s understanding
of the Basel III rules is based on information currently published by
the Basel Committee and U.S. federal banking agencies.

b. Treasury & Securities Services firmwide metrics include certain TSS
product revenue and liability balances reported in other lines of
business related to customers who are also customers of those other
lines of business. In order to capture the firmwide impact of TSS
products and revenue, management reviews firmwide metrics such as
liability balances, revenue and overhead ratios in assessing financial
performance for TSS. Firmwide metrics are necessary, in management’s
view, in order to understand the aggregate TSS business.

c. Pretax margin represents income before income tax expense divided by
total net revenue, which is, in management’s view, a comprehensive
measure of pretax performance derived by measuring earnings after all
costs are taken into consideration. It is, therefore, another basis that
management uses to evaluate the performance of TSS and AM against the
performance of their respective peers.

d. Credit card sales volume is presented excluding Commercial Card.
Rankings and comparison of general purpose credit card sales volume are
based on disclosures by peers and internal estimates. Rankings are as of
1Q12.

e. The amount of credit provided to clients represents new and renewed
credit, including loans and commitments. The amount of credit provided
to small businesses reflects loans and increased lines of credit
provided by Consumer & Business Banking, Card Services & Auto and
Commercial Banking. The amount of credit provided to not-for-profit and
government entities, including states, municipalities, hospitals and
universities, represents that provided by the Investment Bank.

3.Financial restatement:

On July 13, 2012, JPMorgan Chase & Co. reported that it will be
restating its previously-filed interim financial statements for first
quarter 2012. The restatement will have the effect of reducing the
Firm's reported net income for first quarter 2012 by $459 million. The
first quarter amounts in this release reflect the effects of such
restatement. For further information, see the Company’s Current Report
on Form 8-K dated July 13, 2012, which has been filed with the
Securities and Exchange Commission and is available on the Company’s
website (http://investor.shareholder.com/jpmorganchase)
and on the Securities and Exchange Commission’s website (www.sec.gov).

JPMorgan Chase & Co. (NYSE: JPM) is a leading global financial services
firm with assets of $2.3 trillion and operations worldwide. The firm is
a leader in investment banking, financial services for consumers and
small businesses, commercial banking, financial transaction processing,
asset management and private equity. A component of the Dow Jones
Industrial Average, JPMorgan Chase & Co. serves millions of consumers in
the United States and many of the world’s most prominent corporate,
institutional and government clients under its J.P. Morgan and Chase
brands. Information about JPMorgan Chase & Co. is available at www.jpmorganchase.com.

JPMorgan Chase & Co. will host a conference call today at 7:30 a.m.
(Eastern Time) to present second-quarter financial results and an update
on CIO. The general public can access the call by dialing (866) 541-2724
or (877) 368-8360 in the U.S. and Canada, or (706) 634-7246 for
international participants. Please dial in 10 minutes prior to the start
of the call. The live audio webcast and presentation slides will be
available at the Firm’s website, www.jpmorganchase.com,
under Investor Relations, Investor Presentations.

A replay of the conference call will be available beginning at
approximately noon on July 13, 2012 through midnight, July 27, 2012 by
telephone at (855) 859-2056 or (800) 585-8367 (U.S. and Canada) or (404)
537-3406 (international); use Conference ID# 87040825. The replay will
also be available via webcast on www.jpmorganchase.com
under Investor Relations, Investor Presentations. Additional detailed
financial, statistical and business-related information is included in a
financial supplement. The earnings release and the financial supplement
are available at www.jpmorganchase.com.

This earnings release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. These
statements are based on the current beliefs and expectations of JPMorgan
Chase & Co.’s management and are subject to significant risks and
uncertainties. Actual results may differ from those set forth in the
forward-looking statements. Factors that could cause JPMorgan Chase &
Co.’s actual results to differ materially from those described in the
forward-looking statements can be found in JPMorgan Chase & Co.’s Annual
Report on Form 10-K for the year ended December 31, 2011, and Quarterly
Report on Form 10-Q for the quarter ended March 31, 2012, each of which
has been filed with the Securities and Exchange Commission and is
available on JPMorgan Chase & Co.’s website (http://investor.shareholder.com/jpmorganchase)
and on the Securities and Exchange Commission’s website (www.sec.gov).
JPMorgan Chase & Co. does not undertake to update the forward-looking
statements to reflect the impact of circumstances or events that may
arise after the date of the forward-looking statements.

* For now, CIO will retain a portfolio of approximately $11
billion notional amount of mark-to-market positions as an economic hedge
for certain credit exposures of the investment securities portfolio and
tail risk for the portfolio. This long protection (i.e., short credit)
is simple, transparent and easy to explain and will likely be reduced
over time.

1 For notes on non-GAAP measures, including managed basis
reporting, see page 14.

2 Comparisons below are versus prior year.

3 For additional notes on financial measures, see pages 14
and 15.

4 On July 13, 2012, JPMorgan Chase & Co. reported that it
will be restating its previously-filed interim financial statements for
the first quarter 2012. See note 3 on page 15.

5 The Firm holds a $1.15 billion first-loss note issued by
Maiden Lane LLC, which was established by the Federal Reserve to
purchase certain assets from Bear Stearns in March 2008. The Federal
Reserve’s senior note has been completely paid. The Firm received
partial repayment in 2Q12 and now expects to recover the full value of
its first-loss note.

JPMORGAN CHASE & CO.

CONSOLIDATED FINANCIAL HIGHLIGHTS

(in millions, except per share and ratio data)

QUARTERLY TRENDS

SIX MONTHS ENDED JUNE 30,

2Q12 Change

2012 Change

SELECTED INCOME STATEMENT DATA

2Q12

1Q12 (i)

2Q11

1Q12

2Q11

2012

2011

2011

Reported Basis

Total net revenue

$

22,180

$

26,052

$

26,779

(15

)

%

(17

)

%

$

48,232

$

52,000

(7

)

Total noninterest expense

14,966

18,345

16,842

(18

)

(11

)

33,311

32,837

1

Pre-provision profit

7,214

7,707

9,937

(6

)

(27

)

14,921

19,163

(22

)

Provision for credit losses

214

726

1,810

(71

)

(88

)

940

2,979

(68

)

NET INCOME

4,960

4,924

5,431

1

(9

)

9,884

10,986

(10

)

Managed Basis (a)

Total net revenue

22,892

26,757

27,410

(14

)

(16

)

49,649

53,201

(7

)

Total noninterest expense

14,966

18,345

16,842

(18

)

(11

)

33,311

32,837

1

Pre-provision profit

7,926

8,412

10,568

(6

)

(25

)

16,338

20,364

(20

)

Provision for credit losses

214

726

1,810

(71

)

(88

)

940

2,979

(68

)

NET INCOME

4,960

4,924

5,431

1

(9

)

9,884

10,986

(10

)

PER COMMON SHARE DATA

Basic earnings

1.22

1.20

1.28

2

(5

)

2.41

2.57

(6

)

Diluted earnings

1.21

1.19

1.27

2

(5

)

2.41

2.55

(5

)

Cash dividends declared (b)

0.30

0.30

0.25

-

20

0.60

0.50

20

Book value

48.40

47.48

44.77

2

8

48.40

44.77

8

Closing share price (c)

35.73

45.98

40.94

(22

)

(13

)

35.73

40.94

(13

)

Market capitalization

135,661

175,737

160,083

(23

)

(15

)

135,661

160,083

(15

)

COMMON SHARES OUTSTANDING

Average: Basic

3,808.9

3,818.8

3,958.4

-

(4

)

3,813.9

3,970.0

(4

)

Diluted

3,820.5

3,833.4

3,983.2

-

(4

)

3,827.0

3,998.6

(4

)

Common shares at period-end

3,796.8

3,822.0

3,910.2

(1

)

(3

)

3,796.8

3,910.2

(3

)

FINANCIAL RATIOS (d)

Return on common equity ("ROE")

11

%

11

%

12

%

11

%

13

%

Return on tangible common equity ("ROTCE") (e)

15

15

17

15

18

Return on assets ("ROA")

0.88

0.88

0.99

0.88

1.03

Return on risk-weighted assets (f)

1.59

(h)

1.61

1.82

1.60

1.86

CAPITAL RATIOS

Tier 1 capital ratio

11.7

(h)

12.6

12.4

Total capital ratio

14.5

(h)

15.6

15.7

Tier 1 common capital ratio (g)

10.3

(h)

10.3

10.1

SELECTED BALANCE SHEET DATA (period-end)

Total assets

$

2,290,146

$

2,320,164

$

2,246,764

(1

)

2

$

2,290,146

$

2,246,764

2

Wholesale loans

302,820

290,866

248,823

4

22

302,820

248,823

22

Consumer, excluding credit card loans

300,046

304,770

315,390

(2

)

(5

)

300,046

315,390

(5

)

Credit card loans

124,705

125,331

125,523

-

(1

)

124,705

125,523

(1

)

Total Loans

727,571

720,967

689,736

1

5

727,571

689,736

5

Deposits

1,115,886

1,128,512

1,048,685

(1

)

6

1,115,886

1,048,685

6

Common stockholders' equity

183,772

181,469

175,079

1

5

183,772

175,079

5

Total stockholders' equity

191,572

189,269

182,879

1

5

191,572

182,879

5

Deposits-to-loans ratio

153

%

157

%

152

%

153

%

152

%

Headcount

262,882

261,453

250,095

1

5

262,882

250,095

5

LINE OF BUSINESS NET INCOME/(LOSS)

Investment Bank

$

1,913

$

1,682

$

2,057

14

(7

)

$

3,595

$

4,427

(19

)

Retail Financial Services

2,267

1,753

383

29

492

4,020

(16

)

NM

Card Services & Auto

1,030

1,183

1,110

(13

)

(7

)

2,213

2,644

(16

)

Commercial Banking

673

591

607

14

11

1,264

1,153

10

Treasury & Securities Services

463

351

333

32

39

814

649

25

Asset Management

391

386

439

1

(11

)

777

905

(14

)

Corporate/Private Equity

(1,777

)

(1,022

)

502

(74

)

NM

(2,799

)

1,224

NM

NET INCOME

$

4,960

$

4,924

$

5,431

1

(9

)

$

9,884

$

10,986

(10

)

(a) For further discussion of managed basis, see Note (a) on page 14.

(b) On March 13, 2012, the Board of Directors increased the Firm's
quarterly common stock dividend from $0.25 to $0.30 per share.

(c) Share prices shown for JPMorgan Chase's common stock are from the
New York Stock Exchange. JPMorgan Chase's common stock is also listed
and traded on the London Stock Exchange and the Tokyo Stock Exchange.

(d) Ratios are based upon annualized amounts.

(e) ROTCE is a non-GAAP financial ratio, and it measures the Firm's
earnings as a percentage of tangible common equity. For further
discussion of this ratio, see page 46.

(f) Return on Basel I risk-weighted assets is the annualized earnings of
the Firm divided by its average risk-weighted assets.

(g) Basel I Tier 1 common capital ratio ("Tier 1 common ratio") is Tier
1 common capital ("Tier 1 common") divided by risk-weighted assets. The
Firm uses Tier 1 common capital along with the other capital measures to
assess and monitor its capital position. For further discussion of Tier
1 common capital ratio, see page 46.

(h) Estimated.

(i) On July 13, 2012, JPMorgan Chase & Co. reported that it will be
restating its previously-filed interim financial statements for the
first quarter 2012. See note 3 on page 15.